Island Novelties, Inc., of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expenseper unit, and annual sales volume are as follows:Selling price per unitVariable expense per unitNumber of units sold annuallyHawaiianFantasy20922,000$$TahitianJoy$$110336,000Fixed expenses total $664,000 per year.Required:1. Assuming the sales mix given above, do the following:a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company asa whole.b. Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safetypercentage.2. The company has developed a new product called Samoan Delight that sells for $30 each and that has variable expenses of $24per unit. If the company can sell 22,000 units of Samoan Delight without incurring any additional fixed expenses:a. Prepare a revised contribution format income statement that includes Samoan Delight. Assume that sales of the other two productsdoes not change.b. Compute the company's revised break-even point in dollar sales. Also, compute its revised margin of safety in dollars and margin ofsafety percentage. Complete this question by entering your answers in the tabs below.Req 1AReq 1BReq 2AReq 2BAssuming the sales mix given above, prepare a contribution format income statement showing both dollar and percent columns for efor the company as a whole.$Island Novelties, Inc.,Contribution Income StatementHawaiian FantasyAmount%0%%0% $< Req 1ATahitian JoyAmount%0%%0 %Req 1B >TotalAmount00%%%0 %

Hawaiian Fantasy Tahotian Joy Total Amount % Amount % Amount % Sales…

Answered: land Novelties, Inc., of Palau makes…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mauro Products distributes a single product, a woven basket whose selling price is $21 per unit and whose variable expense is $18 per unit. The company's monthly fixed expense is $4,500. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales 1,500 baskets baskets
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Island Novelties, Incorporated, of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Selling price per unit Variable expense per unit Number of units sold annually Fixed expenses total $652,800 per year. Hawaiian Fantasy $ 30 $21 30,000 Tahitian Joy $ 100 $ 25 6,000 Required: 1. Assuming the sales mix given above, do the following: a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the company's break-even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage. 2. The company has developed a new product called Samoan Delight that sells for $30 each and that has variable expenses of $18 per unit. If the company can sell 12,500 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution…
Island Novelties, Incorporated, of Palau makes two products-Hawaiian Fantasy and Tahitian Joy. Each product's selling price, variable expense per unit and annual sales volume are as follows: Hawaiian Fantasy Tahitian Joy Selling price per unit $ 12 $ 120 Variable expense per unit $9 $ 48 Number of units sold annually 36,000 5,400 Fixed expenses total $ 437,000 per year. Required: 1. Assuming the sales mix given above, do the following: a. Prepare a contribution format income statement showing both dollar and percent columns for each product and for the company as a whole. b. Compute the company's break - even point in dollar sales. Also, compute its margin of safety in dollars and its margin of safety percentage. 2. The company has developed a new product called Samoan Delight that sells for $45 each and that has variable expenses of $27 per unit. If the company can sell 12,000 units of Samoan Delight without incurring any additional fixed expenses: a. Prepare a revised contribution…
Need step by step explanation.Mauro Products distributes a single product, a woven basket whose selling price is $14 per unit and whose variable expense is $12 per unit. The company’s monthly fixed expense is $4,600. Required: Calculate the company’s break-even point in unit sales. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.) If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)

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